Boeing Co (BA) did not submit crucial documents related to the flight control system on MAX planes to the FAA during an investigation of the 2018 Indonesia crash.

What Happened

The changes made to the flight control system (MCAS) aboard the MAX jet were passed off as a modification of the plane’s existing speed trim system having limited range and use by Boeing, reported Reuters citing the June 29 report by the U.S. Department of Transportation’s Office of Inspector General (IG).

The report will be made public Wednesday and expose errors made by both Boeing and the FAA in the development and certification of the MAX series. 

Why It Matters

According to Reuters, the report states that “Key FAA certification engineers and personnel responsible for approving the level of airline pilot training were unaware of the revision to (MCAS).”

The 737 MAX planes remain grounded after 346 people lost their lives in accidents in both Indonesia and Ethiopia. The plane’s faulty MCAS system was blamed for these deadly crashes.

The FAA investigation into the Indonesia crash in January 2019 resulted in unfinished documentation as key changes made to MCAS were not disclosed to the federal agency by Boeing. 

After the October 2018 crash in Indonesia, FAA risk analysis determined that uncorrected risk to the 737 MAX was 2.68 fatalities per 1 million flight hours, which exceeds FAA guidelines of 1 fatality per 10 million flight hours.

FAA had proposed a software fix to the MCAS, which, if not implemented, would result in 15 accidents among the entire MAX fleet in its lifetime.

Boeing accepted the decision, and it was to be implemented by June 18, 2019, but before it was done, a second MAX plane crashed in Ethiopia in March 2019. 

On Monday, Boeing recommenced MAX test flights for FAA approval.

Price Action

Boeing shares traded 1.40% lower at $180.74 in the after-hours session on Tuesday. The shares had closed the regular session 5.75% lower at $183.30.